Shares of Varun Beverages Ltd. jumped nearly 3% to the day's high of ₹441.80 on BSE on Wednesday, against the previous closing of ₹430.30, following the company's robust Q1FY27 results announcement. The stock had previously declined 7.5% to ₹429.50 following mixed Q1 results, but the latest strong performance has reversed investor sentiment. Despite the recent volatility, 24 out of 28 analysts maintain 'Buy' ratings on the stock, with only four having 'Hold' recommendations, indicating strong institutional confidence in the long-term outlook. The earnings beat, combined with impressive volume growth across India and international markets, has restored investor confidence in the beverage maker's growth trajectory.
**Varun Beverages delivered robust Q1FY27 results for the quarter ended June 30, 2026, with consolidated revenue from operations rising 20.4% year-on-year to ₹8,451.23 crore, compared with ₹7,017.37 crore in the corresponding quarter of CY2025. Profit after tax (PAT) rose 15.1% year-on-year to ₹1,525.36 crore from ₹1,325.49 crore, driven by strong volume growth across India and international markets. EBITDA increased 17.2% to ₹23,430.4 million, though EBITDA margins declined 76 basis points to 27.7% due to consolidation of Twizza business which currently has lower margins. Gross margin expanded by 44 basis points to 55%, supported by higher contribution from international business, early procurement of key raw materials, and lower sugar consumption aided by higher mix of low- and no-sugar products. Consolidated sales volumes rose 19.8% year-on-year to 466.7 million cases from 389.7 million cases, with India contributing 14.4% volume growth and international markets surging 38.4%.
India volume growth of 14.4% during the quarter exceeded Street expectations of over 20%, as reported by The Economic Times. Management attributed the strong performance to early procurement of key raw materials and lower sugar consumption, which helped offset inflationary pressure on input costs. Chairman Ravi Jaipuria emphasized that the company remains well positioned to deliver sustained and profitable growth, backed by adequate capacity, an expanding product portfolio, strong partnerships and a wide distribution network. The company has no intention of chasing the competitive ₹10 price point, with Jaipuria stating "The 10 rupee is a non-profitable category for us. As long as we are delivering 20% plus growth in most of our markets, we are pretty happy with that growth." Instead, Varun is focusing on larger pack sizes to drive profitable growth, with the recently introduced 400 ml bottle priced at ₹20 helping attract new consumers while preserving profitability.
Varun Beverages entered a strategic alliance with Asahi Group Holdings to introduce the iconic CALPIS brand in India, marking their entry into the value-added fermented dairy beverage category, as reported by The Economic Times. The Board of Directors approved a second interim dividend of 25% of face value, i.e., ₹0.50 per share, resulting in a total cash outflow of approximately ₹1,691 million. August 1 has been set as the record date for determining the entitlement of Equity Shareholders for receipt of the second interim dividend. The company maintained its strong financial position with VBL India remaining net debt free with free cash of ₹14,941 million, though at the consolidated level net debt stood at ₹3,730 million due to the Twizza acquisition.
Kotak Institutional Equities upgraded the stock to 'Buy' with a target price of ₹530, describing the quarter as mixed while highlighting stable domestic realisations and resilient India EBITDA margins. CLSA retained its 'High Conviction Outperform' rating with a target price of ₹629, believing the stock's sharp post-results correction was excessive and expecting continued benefits from production efficiencies and distribution expansion. JPMorgan maintained a 'Neutral' rating with a target price of ₹530, noting that management addressed several investor concerns but cautioning that weather disruptions and competitive intensity at lower price points remain near-term challenges. Citi reiterated its 'Buy' rating but lowered its target price to ₹580 from ₹640, citing investor concerns about whether India's growth trajectory has structurally slowed amid rising competition, though it remains positive on the long-term opportunity citing low category penetration and signs that competitive intensity could gradually moderate.
